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CALVERTON, MD-Though North American intermodal shipping suffered its largest drop ever in Q1, both government and private sources took actions indicating a willingness to make a long-term financial commitment to the integrated approach to freight transport.

According to a May 12 report from the Calverton-based Intermodal Association of North America, overall intermodal traffic suffered a 16.3% drop in Q1 compared to the same period in 2008. The single glimmer of hope was provided by the domestic container category, which actually saw volumes rise 0.1% for the quarter, with the biggest contribution coming from the 53-foot container subcategory, which experienced a 4.6% jump from last year’s total.

Unfortunately, the losses in other categories more than offset domestic container gains. International container volume was particularly hard hit, falling 22.7%. While every IANA region recorded declines, the drop in the the Northwest region was by far the worst at 32.9%. Western Canada saw the smallest decline in international container volume at 11.2%.

But despite the sector’s dismal Q1 showing, long-term prospects appear bright as many freight, transport and industrial real estate professionals believe the strategic combination of long-distance rail and shorter-distance trucking hold the key to more efficient delivery of goods to end users. In remarks to a National Retail Federation conference in Washington, DC, Transportation Secretary Ray LaHood indicated intermodal projects at US ports should qualify for $1.5 billion in federal funding under a grant program in the Recovery Act.

“The $1.5 billion discretionary money, I believe, was put in there by Congress to create intermodal opportunities, which really ports are,” he said. “And we know there are ports in Mississippi and the Gulf Coast, in California, in the Northwest part, in the Northeast part, that really will benefit from the $1.5 billion. And we believe once people see the criteria that we’re going to put out here very soon, that there will be some opportunities for these ports that may need a rail line, that may need some additional infrastructure. We’ll have some opportunities.”

On the private side, Fort Worth-based Burlington Northern Santa Fe Corp. and Jacksonville, FL-based CSX Corp. recently expanded intermodal container service to new cities in the Southeast. The service, which already served Jacksonville, Atlanta and Charlotte, NC, will now include Charleston, SC, Savannah GA, Miami and Tampa.

Both CSX and Burlington Northern are investing sizable sums in building and improving intermodal facilities. Though it has pushed back project launch by about six months, CSX plans to build a new container transfer station at the Port of Jacksonville’s Dames Point facility to handle containers from the newly opened TraPac and Hanjin container terminals. The transfer facility is expected to handle 1.8 million 20-foot equivalent units annually. Meanwhile, Burlington Northern recently completed major improvements at its intermodal yard in Allliance, TX that doubled the facility’s handling capacity to more than a million containers per year.

According to Adam Bridges, assistant vice president of CSX Intermodal Inc., intermodal activity will experience significantly renewed growth once the economic downturn is over because more customers are coming to realize the economic and environmental benefits of moving freight via rail.

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